Dr. Bernie Villegas’ economic forecast at the Asia CEO Forum
In the tumult of economist fear and trepidation, Dr. Bernie Villegas’ consistent optimism perhaps stands out over the years. Dr. Villegas has pointed to our population growth not as a liability, but as a wellspring of domestic demand to buttress global financial upheavals –themain driver of national economic growth.
For 2012, Dr. Villegas reprised the message with supporting facts and figures during the recently concluded Asia CEO Forum held at the Manila Peninsula Hotel’s Rigodon Ballroom. His presentation, “The Philippine Economy: Reaching the Tipping Point”, describes a country not just weathering the global downturn, but on the verge of dramatic, if not explosive growth.
2012: Year of the Philippine Dragon?
According to Dr. Villegas, what we have to do now is act and invest decisively. “There is a condition of super-liquidity in the economy today,” he notes. “Along with that, the government today is correcting last year’s ‘analysis by paralysis’ with regards to PPP (Public-Private Partnerships) infrastructure projects.” He pointed to the approximately Php 1.7B in Central Bank SDA’s ready for release.
The result will be an unprecedented increase in investment funds, mostly domestically sourced. His figures present a compelling case. Since 2004 for example, the Philippines reliance on exports as a percentage of GDP has been relatively low and dropping: in 2004 it was 50.9%, in 2009 it was 31.7%.
Our macroeconomic numbers look equally robust. Inflation has dropped from 9.3% in 2008 to 4.6% in 2011. The dollar exchange rate for 2012 is forecasted at 42-45: 1. This may be positively affected by more OFW fund inflows potentially contributing to US$ 80B in Gross International Reserves for 2012. Overall, and for some this is perhaps the most stunning figure of Dr. Villegas’ presentation, Philippine GDP growth could jump from last years tepid 3.7% to 6-7% this year.
Other noteworthy bodies are in accord with Dr. Villegas’ rosy picture. HSBC’s “The Wider World in 2050 Report” stirred some cynicism when it forecasted the Philippines as the 16th largest economy by the half-century mark, with double-digit growth rates possible in just 10 years.
Dr. Villegas traced the history and achievements of past administrations in achieving “25 years of slow and painful reforms.” 2012 may be the year when it all pays off. “Cory restored democracy; FVR de-regularized and privatized key sectors such as energy; Estrada’s hallmark was infrastructure reforms led by Ed Angara’s initiative to develop the countryside; GMA continued that infrastructure development with notable contributions such as the Philippine Nautical Highway.” He added that PNoy’s main economic contributor and stimulant shall be PPP’s.
For the coming year, Dr. Villegas is hopeful that we are moving away from our “inward, ultra-nationalist and protectionist” economic models and towards one that is more open and dynamic. The government’s current efforts against our historic weaknesses of corruption, red tape, inefficient infrastructure, high rates of poverty, and disaster preparedness bode well for each and every business horizon.
As part of its on-going quest to broaden the horizons and experience of the Philippines’ top C-level executives, PLDT ALPHA Enterprise was proud to sponsor the prestigious Asia CEO Forum, the largest regular business event in the Philippines. Watch out for more ALPHA- inspired events such as the ALPHA Barks and ALPHA Bites series on economic, social, and technology enhancing themes for your organization. For more information on the Asia CEO Forum sponsored by PLDT ALPHA Enterprise, please visit www.asia-ceo.org.